I keep hitting the buy button on Amazon (NASDAQ:AMZN | AMZN Price Prediction), and Alphabet (NASDAQ:GOOGL) just handed me another reason to keep going. When a Mag 7 peer posts Google Cloud growth of 82% with nearly 90% of the Fortune 100 running Gemini Enterprise, that lights up the entire cloud category. The market leader in cloud is still AWS, and AWS reports next Thursday.
The Three Engines I Cannot Stop Buying
My thesis is plain. Amazon is three compounding businesses stapled together: a retail and logistics rail that would take a decade to rebuild, a cloud franchise that just posted its fastest growth in 15 quarters, and an advertising business now clearing more than $70 billion in trailing revenue. Any one of them would earn a top-quartile slot in my portfolio.
Start with AWS. Last quarter it grew 28% year over year to $37.59 billion at a 37.7% operating margin, and Andy Jassy called it “our fastest growth in 15 quarters.” The customer sheet is filling up: OpenAI committed roughly 2 GW of Trainium capacity from 2027, and Anthropic committed up to 5 GW. Amazon’s disclosed AI and cloud backlog now sits at $364 billion, which is contracted revenue standing behind the capex bill everyone loves to worry about.
Second, custom silicon. The Trainium, Graviton, and Nitro chip business is at a $20 billion annual run rate, growing triple digits year over year. Every workload Amazon runs on its own silicon instead of buying merchant GPUs is a permanent boost to that 37.7% AWS operating margin. Alphabet is racing to match with TPU. Amazon is already there.
Third, Bedrock and ads monetize the same customer base twice. Advertising grew 24% year over year on top of a $70 billion run rate, while Bedrock lets Amazon charge enterprises for AI inference on the AWS bill they already pay. That is compounding revenue with almost no incremental sales cost.
Why My Next Dollar Skips Alphabet
I own some Alphabet, and Sundar Pichai’s EPS of $9.11 against a $3.0427 estimate was real. Here is what pushes my next dollar to Amazon anyway: Google’s buyback program was suspended in Q2 2026, its long-term debt jumped from $46.5 billion to $98.2 billion, and Search still carries the revenue mix. Amazon has three engines, no paused buyback conversation, and Google Cloud remains the #3 vendor chasing AWS.
The Risk I Own With Eyes Open
Trailing free cash flow collapsed 95% to $1.2 billion because capex more than doubled, and long-term debt climbed from $65.6 billion to $119.1 billion with 2026 capex heading toward $200 billion. If AI monetization stalls, returns compress. Two facts keep my finger on the button: interest coverage of 35.17 and debt-to-equity of 0.37 mean this balance sheet can carry the bet, and the $364 billion backlog is already contracted against the spend.
The people running the company agree. On May 21, Andy Jassy bought 50,000 shares, AWS CEO Matt Garman added 18,196, and CFO Brian Olsavsky added 15,450. Polymarket now prices a 95% probability that Amazon beats Q2 earnings on July 30, with analyst consensus at $312.87 against a $244.85 close.
My money is going to the one company that owns the retail rail, the cloud rail, the ad rail, and now the silicon rail. My buy button stays warm through July 30 and long after.
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